This is something Progressives are Very Concerned over, despite happening rarely, so Obama is going to act
(Politico) The Obama administration announced on Monday that it will use its regulatory authority to crack down on tax inversions, the maneuver used by Burger King and other companies to cut their tax bills by moving their tax home outside the United States.
“We’ve recently seen a few large corporations announce plans to exploit this loophole, undercutting businesses that act responsibly and leaving the middle class to pay the bill, and I’m glad that [Treasury] Secretary [Jack] Lew is exploring additional actions to help reverse this trend,” President Barack Obama said in a statement.
It’s the latest bid by the White House to make policy on issues it says Congress cannot agree on, and comes amid a summer of companies mulling the moves offshore. It drew immediate criticism from Republicans.
Congress, specifically the House, which is what Obama’s referring to, has agreed on it, and their position is they want to fix the conditions of high taxation. But they know it won’t pass the Dem controlled Senate, nor would Obama sign it, since both want to continue sticking it to companies in a way other nations don’t.
Both Lew and Obama have said that they would prefer to see Congress take action to prevent inversions, but lawmakers have been deadlocked. Most Republicans have argued that a tax code overhaul is the only way to prevent companies from moving abroad, while Democrats would prefer to do something to address inversions, nothing that tax reform is a ways off.
BTW, Obama doesn’t want congress to act, because he would then lose his ability to whine and blamestorm. The demagoguery.
The actions announced Monday fall into two broad categories — those that make existing inversions less lucrative and those that make future moves more difficult to engineer.
So, punitive measures, ones that harm US companies and make it harder for them to compete globally. Figures. Oh, and they will retroactively affect any deal that is in the works but hasn’t finalized. Almost seems like an ex post facto law, eh?
The solution is to significantly lower or do away with the tax on income derived from outside the country, the same as most other nations. Dems, wont, though.